“It is a very, very difficult market for them,” said Tim Murphy, who as managing director for TIM Group in New York, follows overall market trends.

The once high-flying money men with their 2 percent (of assets under management) and 20 percent (on profits) fee structures are being hit hard by the European debt crisis and negative US economic data, a new study by Natixis Global Asset Management confirms.

Although individual investors are fleeing the equity markets, which they increasingly view as a casino where the odds are not in their favor, professional money managers can’t move their money to cash without provoking outrage from their investors.

The Naxis study shows that 82 percent of professional investors find it a challenge to survive the market’s volatility.

Roughly the same number say it’s difficult to deliver their projected returns in this environment.

“If you had just put your money on an index fund on the S&P this year, you would have done better than most of the hedge funds and institutional managers,” says Murphy.

The implications are huge. Institutional investors combined control about $38 trillion in private wealth in North America alone, according to a recent Boston Consulting Group report.

An additional $16 trillion are in public and private US pensions, and several trillion dollars more are in foundations, charities and other institutions, analysts say.

“I think we have some global macro issues ahead, including the so-called fiscal cliff, the election in November, noise in Europe — and we have slow-growth issues at home too,” said Murphy. “The challenge is, how do you make above-market returns in this environment?”

That was on the minds of respondents to the Natixis global survey of institutional investors. Among US institutional investors, the survey found:

* 76 percent had difficulty protecting their portfolios from “dramatic swings” in value.

* 78 percent are challenged by so-called tail risk — the danger of a portfolio moving more than three standard deviations from its current price.

* Almost 65 percent agreed that reducing risk would result in taking lower returns.

Pending regulatory restrictions are also weighing heavily on institutions.

About three out of four institutions in the US believe they will be less competitive for this reason. They see regulatory restrictions on their market-making activities as inevitable.